We will tell you everything you need to know about registering a company in Hong Kong. This country is deservedly considered one of the top jurisdictions in terms of doing business.
How to register a company in Hong Kong (registration procedure)?
To register a company in Hong Kong remotely and without sending any documents by courier service to Hong Kong, you must provide a package of registration documents, as well as documents in relation to each director and shareholder of such a company.
In terms of procedure, a Hong Kong company can be registered:
- by electronic submission of documents (the fastest option); and
- by sending signed registration forms (hard copies) and submitting them to the register.
Read about company formation in Turkey
Which documents are required to register a company in Hong Kong?
- Three variants of the company name, in order of priority;
- Scanned copy of the passport of the director and the founder or other document confirming the identity;
- Selfie with the founder's passport;
- A document confirming the address (passport or utility bill) of the director and founder, not older than 3 months. The document must be in English or translated into English;
- Scanned copies of signed registration forms.
Hong Kong company structure
? Director of a Hong Kong company
A Hong Kong company must have at least one director. Moreover, such a director does not have to be a resident of Hong Kong.
Both corporate directors (legal entities) and individuals are allowed.
The director of the company cannot simultaneously hold the post of secretary.
In Hong Kong, the practice of providing the service of a nominee director. It should be remembered that if the nominee director is a resident of Hong Kong, this may negatively affect the company's chances of obtaining "offshore" status. In addition, nominee directors in Hong Kong fear the real responsibility they will incur in Hong Kong if the company becomes involved in fraudulent activities. For this reason, it is more common to appoint a non-resident of Hong Kong as a nominee director.
? Shareholder of a Hong Kong company
Both individuals and companies can be shareholders.
There are no residency requirements for shareholders.
The minimum number of shareholders in a Hong Kong firm is one.
The service of the nominee shareholder is practiced in Hong Kong and is regulated by local laws. Declarations of trust are subject to mandatory registration in the register of companies.
? Hong Kong Company Secretary
The company secretary can only be a resident of Hong Kong (natural or legal person). We provide secretarial service for Hong Kong companies.
The secretary performs the technical functions related to the correct administration of the company in Hong Kong. For example, he prepares the minutes of the annual meeting of shareholders, accompanies the filing of changes in the composition of directors, shareholders, and so on in the register.
The authorized capital of a Hong Kong company
The minimum share capital is 1 HKD.
As a rule, capital of HKD 10,000 is prescribed in the statutory documents.
The authorized capital does not have to be paidto the company's bank account, which simplifies the procedure for registering an offshore company in Hong Kong.
Offshore in Hong Kong (Obtaining the status of an offshore company)
Actually, Hong Kong as a jurisdiction has gained wide popularity and has become a kind of "Mecca" for businessmen from all over the world due to a well-thought-out system of territorial taxation. Hong Kong companies are eligible for Offshore Profits Tax Exemption if they do not operate in Hong Kong.
For this reason, many still want to buy an offshore company in Hong Kong.
At the same time, Hong Kong cannot be called a classic offshore, but it is quite possible to reduce the corporate tax to zero. Hong Kong is also called "midshore".
A company is eligible for corporate tax exemption, subject to the following conditions:
- Company employees are not residents of Hong Kong or visit Hong Kong on rare occasions;
- The goods traded by the company are not transported through the Hong Kong customs area;
- Negotiations with customers and suppliers do not take place in Hong Kong;
- The place of signing the contracts is not Hong Kong;
- The company does not provide any services in Hong Kong;
- Business management (management) is carried out outside Hong Kong;
- The company has no Hong Kong counterparties.
An application for offshore status is filed with the Hong Kong Tax Office along with a Profits Tax Return (PTR) and an audit report.
There is a chance that the IRS will want to make sure that all transactions took place outside Hong Kong, and will request additional documents for verification.
Benefits of opening a company in Hong Kong
- You do not need to pay corporate tax if the company does not operate in Hong Kong and receives tax exemption;
- Even if the company operates in Hong Kong, it is difficult to name high taxes in Hong Kong (16.5%). Moreover, tax breaks are provided for start-up businesses with low turnover (8.25% on the first 2 million HKD of profit).
- In Hong Kong, there is no such thing as value added tax (VAT);
- Hong Kong's corporate law is based on the Anglo-Saxon law model, which provides flexibility in company management and resolution of corporate conflicts;
- Hong Kong companies are not considered "offshore" in their purest form, which significantly affects the ability to open accounts in banks and payment systems;
- No need to pay for the authorized capital;
- The company is registered and managed completely remotely;
- Legal regulation of nominee services. Your asset will be protected even if you use nominee directors or nominee shareholders in the company structure;
- Don't be ashamed to say to your friends, "I have a company in Hong Kong".
- It is relatively inexpensive.
Disadvantages and risks of opening a company in Hong Kong
- Substance. Often, when working with banks, it becomes necessary to ensure the real presence of the company in the country of registration. The required minimum is a local director and a rented office space in Hong Kong. In this case, the organization of subsistence is a direct path to the fact that the company will not be able to receive exemption from corporate tax.
- Not all European banks and payment systems are ready to open accounts for Hong Kong companies; Often, for British, Lithuanian, Czech and other payment systems, as well as for European banks, it is preferable to open accounts for European companies, rather than companies registered outside the European Union. It should also be borne in mind that for companies registered outside the EU, increased rates for banking services may apply.
- Risk of notgetting offshore profits tax exemption. Unfortunately, this risk exists if you do not follow the simple guidelines for using Hong Kong companies. In our practice, there were cases when the place of signing of contracts was indicated in Hong Kong, which entailed the refusal of the tax service to issue an exemption from corporate tax.
- An audit of a Hong Kong company needs to be carried out annually, which can cost several thousand dollars.
- Our brother will most likely fail to open an account in Hong Kong. Hong Kong banks do not complain about the beneficiaries of companies from the CIS countries (for example, Ukraine, Belarus, Russia). Fortunately, there are alternatives to Hong Kong banks where you can still open an account for a Hong Kong company.
How long does it take to open a company in Hong Kong
If you register a company by filing an electronic registration application, then it will take only 2 - 4 working days from the date of filing for the company to appear in the register.
If you register a company by signing paper forms and mailing them to Hong Kong, then the company registration period can take about three weeks from the date of filing the registration application.
Thus, it is possible to open a company in Hong Kong in an extremely short time.
Do I need a personal presence?
No, personal presence is not required when registering a company in Hong Kong.
Personal presence is only required if you intend to interview a Hong Kong bank to open an account.
You can run a business remotely.
Prices for registering a company in Hong Kong
The cost of our services for registering a company in Hong Kong is from 1650 Euro.
DHL courier from Hong Kong is paid separately - 100 Euro.
The package of services for registering a company in Hong Kong includes:
- Company registration services;
- Secretary services and legal address for the first year;
- Payment of state fees for the first year;
- Designated representative services for the first year.
A set of documents that you will receive upon registration:
- registration certificate;
- business registration certificate (tax registration certificate);
- articles of association and articles of association;
- Form NNC1 (registration form);
- Company's stamp.
Important! The documents are produced in originals without additional certification by a notary / oath official and without an apostille. If it is necessary to certify and apostille documents, we will separately calculate the cost of such documents, depending on the type of certification you have chosen. A more expensive option is a notary; the cheaper one is the oath official.
If you want to buy a company in Hong Kong (existing), then the price is determined depending on factors such as the age of the company.
Company maintainence in Hong Kong
The cost of a company in Hong Kong (extension) from the second year is from 1450 Euro.
The renewal price includes:
- Renewal of the legal address;
- Registered secretary services;
- Payment of state fees;
- Designated representative services.
* the prices shown on our website are indicative only. You can check the exact cost of registering a company in Hong Kong with us by leaving a request on the website, or by contacting in any other convenient way.
Business licensing in Hong Kong
Obtaining a money service operator license (MSO - Money Service Operator) is popular in Hong Kong.
The MSO license is issued by the Hong Kong Customs and Excise Department under the Hong Kong Anti-Money Laundering and Terrorist Financing Ordinance.
Such a license allows the licensee to:
- Engage in currency exchange;
- Engage in the transfer of funds to third parties.
To obtain an MSO Hong Kong license, individuals within the company structure must be fit and proper. In practice, this means that they sign a declaration in which they declare that they have no criminal record for financial or money laundering crimes.
Documents required to obtain an MSO license in Hong Kong:
- Completed Fit and Proper form (declaration) for each person for whom such a form is to be completed;
- Business Registration Certificate (standard document for all Hong Kong companies);
- Certificate of Incorporation;
- Charter.
Procedure for obtaining an MSO license in Hong Kong:
- Collection and analysis of the necessary information and documents;
- Filling out forms;
- Applying for an MSO with the Hong Kong Customs and Excise Department.
The term for obtaining an MSO license is 3-5 months.
The cost of support for obtaining a license is from 3500 Euros.
Corporate taxes in Hong Kong
Income tax
The payers of income tax in Hong Kong are, in particular, legal entities registered in Hong Kong.
Income tax base. Hong Kong has a territorial taxation system, which means that only income earned from its source in Hong Kong is taxed.
Rate. The standard income tax rate in Hong Kong is 16.5% for companies. A reduced rate of 8.25% applies to the first HK $ 2 million of profits. Profits in excess of 2 million are subject to corporate tax at the standard rate.
Dividends
As a general rule, dividends are not taxed in Hong Kong. Both incoming and outgoing.
Capital gain
As a general rule, capital gains (for example, the sale of an interest in a subsidiary) are not taxed in Hong Kong.
VAT
As mentioned earlier, there is no value added tax in Hong Kong.
Audit of a Hong Kong company / offshore reporting in Hong Kong
If you are planning to form a company in Hong Kong, it must be borne in mind that such a company is required to maintain accounting records. Accounting is carried out on the basis of the primary documentation of the company's business activities (bank statements, invoices, sales and purchase agreements, loan agreements, other contracts).
A prerequisite for a company to operate in Hong Kong is the preparation and submission of an annual financial report. The financial report is submitted to the local tax office and includes information on profit, loss, other balance sheet indicators, as well as explanations for the data presented in the report.
Companies doing business must undergo an audit of their financial statements. The audit is authorized to be carried out by audit companies licensed in Hong Kong.
The first statements of the company must be filed with the tax office after about 18 months from the date of registration (incorporation) of the company.
Together with the audited financial statements, the company annually submits a statistical report (Annual Return)to the register of companies. The report includes basic data on the company's management structure (data on the director, secretary), the address of the company and the types of activities that the company carries out.
Selection of a secretary, registered office and designated representative for a Hong Kong company
A secretary, a registered office and a designated representative are mandatory attributes of any company in Hong Kong.
If everything is clear with the secretary and the legal address, then the designated representative is a relatively new concept that appeared in 2018 after the introduction of the significant controllers register.
A designated representative in Hong Kong is a person appointed by a company to maintain the register of significant controllers of the company. It must be an individual, resident of Hong Kong.
Actually, you don't have to worry about choosing a legal address, secretary and appointed representative for the Hong Kong company. We take care of all these troubles when registering an offshore company in Hong Kong.
What kind of business is better to open in Hong Kong
Hong Kong is a fairly universal jurisdiction that allows you to register companies with both a holding business and active trading and service companies.
Of course, it can also be service outsourcing IT companies that provide services and receive payment under contracts / invoices.
For IT grocery companies with beneficiaries from the CIS countries, Hong Kong is hardly suitable, since many cases may require an account in a Hong Kong bank to receive payments from various platforms that require the same country of registration of the company and the country of the serving bank.
Hong Kong is the most popular among trade and transport companies doing business related to the export of products from China to other countries.
We help clients to form a business in Hong Kong.
How to open a Hong Kong bank account
If you are not the happy owner of a passport of some respectable state (say, Germany), you will most likely not be able to open an account in a Hong Kong bank for your Hong Kong company.
Banks in Hong Kong have long been allergic to the beneficiaries of companies from Ukraine, Belarus, Russiaand other countries that fall under the high-risk category.
Where can I open an account for a Hong Kong company?
Read about opening an account with OCBC Wing Hang Bank (China) Limited. It is one of the top banks in the Asian region where you can open an account with a Hong Kong company to do business.
Opening an account for Hong Kong firms is also possible in Serbia, Kazakhstan and Turkey.
Well, do not forget about payment systems, of which there are quite a few. They are also willing to open accounts for Hong Kong firms.
Is it possible to run a business in Hong Kong remotely?
Business management, and the company itself in Hong Kong, is completely remote.
You do not need to visit Hong Kong to prepare an audit of a Hong Kong firm, to hold general meetings of shareholders, or for any other formalities related to company administration.
The only time you may need to visit Hong Kong is to meet with a bank(if you would like to try opening an account with a local bank in Hong Kong).
Choosing a name for a Hong Kong company
The name of a Hong Kong company must not match or resemble the name of an existing company.
In this case, there is a chance that the register of companies, after receiving the registration application, will refuse to carry out the registration procedures and will have to submit a new application, but with a different name.
To prevent this from happening, we check the name of the future company on the register website for possible matches.
The name of the company must necessarily contain the prefix “Limited”.
Which form of activity is better to choose?
The main form of business (form of business) is a limited liability company, that is, a limited liability company. There are also other forms of doing business, for example, partnerships, private entrepreneurs, branches or representative offices of foreign companies.
A limited liability companyis a universal form of business where the company is registered as a non-resident of Hong Kong.
Permitted activities
Hong Kong companies are free to conduct any legitimate business.
Some specific activities may require a license, for example, for banks, insurance companies, money transfer operators.
Shelf companies in Hong Kong
Shelf companies in Hong Kong have a place to be. These are the companies that are registered to a specific person and re-registered to the end customer at the time of sale.
What is the feasibility of shelf companies in Hong Kong? In fact, there is no particular expediency. The procedure for re-registering an enterprise will take the same period of time as the registration of a new company. And shelf companies, as a rule, are more expensive than the procedure for registering a company from scratch.
The only option when buying a shelf company in Hong Kong makes sense is when you need to acquire a company with a specific history or a specific age (aged company).
If this option is interesting, we will help you with buying a shelf company in Hong Kong.
How to close a Hong Kong company?
The Hong Kong company is closed by liquidation.
The liquidation procedure for a company in Hong Kong begins from the moment the company ceases all of its operations. At the time of termination, any company bank accounts must be closed.
Also, on the date of the termination of activities, a special audit report is prepared.
After the audit report is ready, the company submits documents to the Hong Kong tax office to authorize the liquidation of the company.
From a practical point of view, the procedure for liquidating a company in Hong Kong takes about 9 months.
FAQ
❓Which documents will I receive after registering a company in Hong Kong?
?Is it possible to obtain offshore status in Hong Kong and not pay corporate tax?
✍How difficult is it to maintaine a company in Hong Kong?
?Is it possible to open a Hong Kong bank account for a Hong Kong company?
?How often do I need to file audit reports for a Hong Kong firm?
?Which primary documents does a Hong Kong auditor need to draw up and submit a report?
?Is it possible not to pay a salary to the director of a Hong Kong firm?
?Is it possible to apostille the documents of Hong Kong company?
☯What is the geopolitical situation in Hong Kong?
?Whether it is necessary to postpone the registration of the company until tomorrow?
Do you want to buy an offshore company in Hong Kong? Urgently leave a request on our website!
